Software Circle Share Discussion Threads

[contrarian2investor] 28/5/2010 11:44

charlie

I agree that is always best to be cash rich, especially in this environment. SFT could easily double its footprint with a shrewd acquisition and therefore enhance the share price folllowing increased profits. This would be far more beneficial to all shareholders than a special one off distribution.

I completely disagree with the statement, "too much cash and no priority to dividends will lead to stupid acquisitions". Why would that be the case? Please explain that theory for us?

It always pays to be prudent and also patient. During which time we all continue to receive a dividend from a growing entity. Not many mirco-caps on the AIM (or for that matter the FTSE)can provide such potential. If you know of any please share them with us. TIA

c2i

[charlie] 28/5/2010 10:02

They could pay a much higher dividend and still have plenty for sensible acquisitions.

Too much cash and no priority to dividends will lead to stupid acquisitions.

[gazza102] 28/5/2010 09:00

Totally agree buggy spend the cash on income/profit generating, not special dividend etc.

Then watch the share price go up.

[buggy] 27/5/2010 22:31

Charlie,

Not quite sure I agree that they should empty the coffers. A good reserve of cash means that they can take advantage of any acquisition opportunity for cash without the need to issue more shares.

Noted that they made mention of acquisition in their AGM statement. I don't think that they have done that before... so they are in acquisitive mode if a good opportunity materialises.

[charlie] 27/5/2010 19:31

AGM statement looked OK.

Cash generated from operations $7m in 2009, $4m in 2008, $2.7m in 2007.

So why do they need to keep $14.9m cash on the balance sheet? $4.4m loan to a property developer (accounts note 14) coming back in August 2010 as well.

The dividend of 0.31p absorbs just $0.75m at current exchange rates.

Great little company, but weighed down by too much cash! They should dole some more out to the shareholders. A special dividend, or increase the dividend, or buybacks, or something.

[contrarian2investor] 21/4/2010 15:20

zangdook,

Welcome, plenty more baggers to come if you are patient enough.Their explosive growth that I was expecting from Jan 09 has not arrived yet, but when it does we should see SFT much higher. Furthermore SFT's diverse applications have not even really got going yet.

I'll be holding for the long-term.

c2i

[zangdook] 21/4/2010 14:51

I've very nearly doubled my money in less than a year.

[drewz] 21/4/2010 13:11

Yeah. Sinosoft = the new Chinese Microsoft; that's what they were saying at IPO back in 2006. Fat lot of good it did.

It would not surprise me at all for this still to be sub IPO price in 3 years time. Their sales growth is proceeding at a glacial pace.

Far better opportunities to make money elsewhere, imho.

[charlie] 21/4/2010 10:40

edited - email address

[explorer88] 21/4/2010 09:45

morning buggy - only in your short term analysis of H1, extrapolating from H2.

whilst SAT may be important, don't underestimate other growth areas - especially their RFID work ;-)

[buggy] 21/4/2010 09:13

explorer,


Thought that you think I was being over exuberant. I think we will see 10X the current price in less than 5 years.

Once SAT comes on there will be a step change in TO. The economic downturn was a blessing in disfuise for SFT as it forced them to diversify, before that they were overly dependent on SAT.

I am also pleased with the apointment of a new Chairman, may help take the conmpany to a new level.( Not that I have any problem with the previous one, but founding members are not always best suited for moving a company to the next level, sometimes the injection of new idea and new blood is required).

[explorer88] 21/4/2010 08:56

I've been in regular contact with Sinosoft and know their business pretty well.

I have no doubt that Sinosoft will become a £75m - £150m m/c company over time 5x - 10x current m/c

Like one or two others i have built a large long term holding in the business

GLA

[stewolf] 21/4/2010 08:41

Just looked in after being on hols (took ages to get back!) and what a pleasant surprise. Steady as she goes (with a pick up in H2) and another divi to collect.

[boadicea] 20/4/2010 15:09

contrarian - I'm afraid that with a capitalisation of about £15M the company is too small for a dual listing. My point was rather that AIM is currently providing a cheap way into Eastern promise.

My hope is that UK valuations will gradually close the gap, or that seeing the low rating of Eastern companies on AIM, some of them will be recognised as cheap take-over targets. Whether SFT was one of these might not matter as the resultant up-rating would likely spread across the sector.

Of course, larger companies, like CHNS or WCC, are in a different position with a wider choice of listing strategies.

[contrarian2investor] 20/4/2010 11:49

boadicea,

I agree with your above points.
It has been slow but steady progress with the dividend offsetting the wait for fuller investor appreciation. Which as you say could be enhanced by a Far East listing. As long as their Aim listing is retained so that we also get to enjoy the ride.

c2i

[gjb] 20/4/2010 11:23

That's a fair comment and the past has been bad for TOMCO.
Seems to be a lot of over exuberance on the TOM bullet board which is clouding peoples opinion.

I need it to get back up to 1.5p to get my money back.

I'm hoping Chris Brown can wipe the slate clean as he appears to have good credentials.

[zangdook] 20/4/2010 10:38

gjb
OT
I have a small holding in TOM but currently plan to sell as soon as it relists. I don't trust the remnants of the previous board so I haven't looked into the new developments closely enough to comment.

[gjb] 20/4/2010 10:19

P/E of only 6 - should be higher in my opinion.

zangdook - off subject but what's your opinion of TOMCO?

[zangdook] 20/4/2010 10:14

Results. 0.31p dividend. P/E about 6.

[gjb] 20/4/2010 10:13

Rock solid set of figures plus a proposed divi of 0.31 pence.
Only up half a pence so far today but should be higher based on profit achieved.

[contrarian2investor] 16/4/2010 20:00

garth,

Good to see you on board. Don't you and rivaldo usually come as a pair.
It is always good to have some more shrewdies on board.

c2i

[garth] 16/4/2010 18:33

I added some more earlier this week too.

Saw there were 2 posts and thought maybe we'd moved up again. Should clear 10p once the results are out. Trading statement was good and perhaps we'll see an improving outlook...

G.

[boadicea] 16/4/2010 18:05

The last two annual results were -
28 April 2008
15 May 2009
I would hope to see them before the end of this month if only on the basis that late results are more often poor results!